Posted By Jeff Moad, April 14, 2015 at 10:08 AM, in Category: The Adaptive Organization
Many manufacturers complain that they struggle to sustain momentum behind continuous improvement initiatives that use Lean and Six Sigma methodologies. Although these methods are proven and well-understood, many organizations find they aren’t systematically and strategically applying them to the process problems that, once fixed, will deliver the greatest value—and bottom-line payoff—to the company.
As a result, Lean/Six Sigma programs often fizzle. Surveys by organizations such as the Lean Enterprise Institute consistently show that upwards of 50% of organizations attempting to adopt Lean experience some level of backsliding to old ways of doing things. Even Lean standouts often say they encounter problems sustaining momentum.
Recently, however, I’ve come across manufacturers who say they’ve made headway in improving the strategic focus of their continuous improvement initiatives by combining Lean and Six Sigma methods with ideas from the Theory of Constraints (TOC.) TOC, as most manufacturers will recall, was introduced to the world in the 1984 business novel The Goal, by Eliyahu M. Goldratt. While Lean focuses on the prioritization of customer value and the elimination of waste, and Six Sigma seeks to eliminate process variation, TOC aims to increase throughput—and therefore bottom line benefit—through the rigorous identification and elimination of bottlenecks—or constraints—in the context of an overall process system.
We see manufacturers—some members of the Manufacturing Leadership Council—using TOC concepts to identify which process improvements would deliver the biggest bang for the buck. Then they are applying Lean and Six Sigma methods to eliminating those process bottlenecks.
This idea, of course, is not new. For a while, the Goldratt Institute has advocated an integrated TOC/Lean/Six Sigma approach in which TOC principles are used prioritize the process improvement strategy and to design the broad outlines of the new process design. Then Lean and Six Sigma are used to implement the process improvement and sustain results.
TOC theory even includes an accounting system—Throughput Accounting—that can help manufacturers quantify the bottom line benefits of their continuous improvement initiatives.
Although the idea of combining TOC, Lean, and Six Sigma isn’t new—the Goldratt Institute coined the term TOCLSS (TOC/Lean/Six Sigma) for the approach—it may be particularly relevant today as manufacturers attempt to apply limited resources to just those process improvements that will pay off the most.
What’s been your experience with combining TOC, Lean, and Six Sigma?
Written by Jeff Moad
Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit